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Front-loaded deals on NHL owners' hit list

Henrik Zetterberg’s front-loaded contract would have been handled differently under a league proposal. (David Guralnick/Detroit News)

Bill Daly, deputy NHL commissioner, called it "the hill we will die on."

In the protracted search between the league and the players' association for a new collective bargaining agreement, the owners are adamant in seeking to eliminate the long-term, front-loaded contracts, generally associated with the 15-year, $100 million deal Ilya Kovalchuk signed with the Devils in 2010.

But that fact is the Red Wings are largely responsible for devising the contractual formats.

And under a proposal from the NHL, believed to still be on the table, teams would be penalized for having signed such deals if the players stop playing before the end of the contract.

If the sanctions become part of a new agreement, they would affect the long contracts to which the Red Wings have signed Henrik Zetterberg, Johan Franzen and Niklas Kronwall — two of their three best forwards and their best defenseman.

It also casts light on their inability to sign Zach Parise and Ryan Suter, highly-prized free agents who signed with the Wild last summer.

Commissioner Gary Bettman, Daly and the league propose that all of the years and pay for a player signed to a contract longer than five years should be charged to the salary cap for the team, regardless whether the player is playing.

"While such contracts and cap charges can be traded during their terms, in the event a player subsequently retires or ceases to play, the effective cap charge would revert to the club that originally entered into the contract," league officials proposed two months ago.

In other words, if Kovalchuk retires, suffers a career-ending injury or is waived, the Devils would be responsible for the hit against the salary cap. That would be true even if they trade Kovalchuk first.

Under the proposal, an injured, retired or waived Kovalchuk would cost the Devils $6.7 million against the cap every year through 2024-25.

Cap hits

The same circumstances would affect the three Red Wings, and any player the team would sign to a similar deal.

The proposed collective bargaining language would partially stymie the intent of the Red Wings when they signed Zetterberg to a long, oddly-constructed deal in 2009, hoping it would provide enough money to secure the outstanding forward while helping them spread out cap charges.

Facing a salary cap that negated the propensity of owners Mike and Marian Ilitch to finance one of the highest-paid lineups in the NHL, the Red Wings brain trust under Ken Holland debuted the first dramatically long-term, front-loaded contracts in 2009.

They were not quite as asymmetric in value between the early years and later years of the deals as the contract for Kovalchuk, but they clearly were the mold for subsequent deals.

Zetterberg, 32, signed a 12-year deal for $73 million, and he stands to earn $7 million or more until he is 38 years old in 2017-18, $3.5 million the next season and $1 million in each of the last two seasons, when Zetterberg would be 40 and 41.

Under the proposal the Red Wings would have $6 million charged against the salary cap, regardless of whether Zetterberg is still playing for them, retired or waived out of the NHL.

Franzen's 11-year $43.5 million contract, also signed in 2009, would have a cap hit of nearly $4 million annually through 2020. Franzen is 33.

And Kronwall's seven-year, $32.5 million deal signed this year, has a cap hit of $4.75 million through 2019. Kronwall is 31.

Had the Red Wings won the rights to Parise and Suter — the pair signed for $98 million each, demanding they be paid the same and revealing their plan to play together — they would be on the hook for another $15 million each year through 2024-25.

Wide implications

While Holland and other Red Wings officials are prohibited from discussing ongoing negotiations between the NHL and NHLPA, Holland made clear last summer that binding the team's hands in the future is one reason they were concerned about signing Parise and Suter.

Beyond Kovalchuk, some big contracts that suddenly look even more unattractive are those of Canucks goaltender Roberto Luongo and Islanders goaltender Rick DiPietro.

At least 30 players have contracts affected by the proposal. Most teams have one or two players who would be affected; some have none. The Red Wings have three.

Whether it is ultimately included in a prospective bargaining agreement is not clear, but Bettman has joined Daly in making clear the length of contracts for individual players and how much they can diverge from year to year are two of the major issues remaining for the owners.

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